For each of the following potential unrecorded liabilities, determine the effects of the omission on both the
Question:
1. An invoice for $3,000 worth of inventory items, dated January 1 and bearing terms of FOB destination, was not recorded. The goods were shipped December 27 and were received on December 30.
Balance Sheet Effect:
Income Statement Effect:
2. An invoice for $5,500 worth of inventory items, dated December 30 and bearing terms of FOB destination, was not recorded. The goods were shipped December 28 and received January 2.
Balance Sheet Effect:
Income Statement Effect:
3. An invoice for $8,000 for a delivery truck, dated January 2 and bearing terms of FOB shipping point, was not recorded. The truck was shipped December 30 and received on January
Balance Sheet Effect:
Income Statement Effect:
4. An invoice for $1,000 for legal fees rendered in December was not recorded.
Balance Sheet Effect:
Income Statement Effect:
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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